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Companies Act 1993

Registrar of Companies - Registrar's powers to identify controllers of company

365D: Extension of basic rule to interests held by other persons under control or acting jointly

You could also call this:

“Extending share control rules to include indirect influence and joint actions”

This law explains when someone is considered to have control over a company’s shares, even if they don’t own them directly. You have control if:

Someone else follows your instructions about the shares.

You can control 20% or more of the votes at a company meeting.

You can buy or sell 20% or more of the company’s voting shares.

Your company and the other company are closely connected.

You have an agreement with someone else to work together on controlling the shares.

The law also explains what counts as a ‘share’. It’s not just company shares, but can include things like partnership interests too.

The law defines who counts as a ‘director’ for different types of businesses. This is important because directors often have control over shares.

Finally, the law explains when two companies are considered ‘related’. This matters because related companies can have control over each other’s shares. Companies can be related if one owns the other, if they share owners, or if their businesses are very closely linked.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6462552.

Topics:
Business > Industry rules
Business > Fair trading
Government and voting > Government departments
Previous

365C: Extension of basic rule to powers or controls exercisable through trust, agreement, etc, or

“Power over a company can come from trusts or agreements, even if not directly involved”

Next

365E: Situations not giving rise to control interests, or

“Certain situations that don't count as having control of company shares”

Part 20 Registrar of Companies
Registrar's powers to identify controllers of company

365DExtension of basic rule to interests held by other persons under control or acting jointly

  1. A person (A) has a control interest in a share that another person (B) has if—

  2. B or B's directors are accustomed or under an obligation (whether legally enforceable or not) to act in accordance with A's directions, instructions, or wishes in relation to a power or control referred to in section 365B; or
    1. A has the power to exercise, or control the exercise of, 20% or more of the votes that may be cast at a meeting of shareholders of B; or
      1. A has the power to acquire or dispose of, or to control the acquisition or disposal of, shares that have 20% or more of votes that may be cast at a meeting of shareholders of B; or
        1. A and B are related bodies corporate; or
          1. A and B have an agreement, arrangement, or understanding to act in concert in relation to a power or control referred to in section 365B.

            1. For the purposes of subsection (1),—

              share includes—

              1. a share in a company:
                1. a share in an industrial and provident society:
                  1. a share in a building society:
                    1. a partnership interest in a partnership

                      shareholder means a holder of a share.

                      1. For the purposes of subsection (1)(a), director means,—

                      2. in relation to a company, any person occupying the position of a director of the company by whatever name called:
                        1. in relation to a partnership (other than a limited partnership), any partner:
                          1. in relation to a limited partnership, any general partner:
                            1. in relation to a body corporate or unincorporate other than a company, partnership, or limited partnership, any person occupying a position in the body that is comparable with that of a director of a company.

                              1. For the purposes of subsection (1)(d), a body corporate (A) is related to another body corporate (B) if—

                              2. B is A's holding company or subsidiary; or
                                1. more than half of A's issued shares (other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital) are held by B and bodies corporate that are related to B (whether directly or indirectly, but other than in a fiduciary capacity), or vice versa; or
                                  1. more than half of the issued shares (other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital) of each of A and B are held by members of the other (whether directly or indirectly, but other than in a fiduciary capacity); or
                                    1. the businesses of A and B have been so carried on that the separate business of each body corporate, or a substantial part of that business, is not readily identifiable; or
                                      1. there is another body corporate to which A and B are both related.

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                                        Notes
                                        • Section 365D: inserted, on , by section 48 of the Companies Amendment Act 2014 (2014 No 46).